Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.

Saturday, December 21, 2013

Turkey's corruption scandals widens as Prime Minister threatens to expel foreign ( US ) Ambassadors engaged in provocative actions ( such as the US Ambassador telling European Union envoys that Washington warned state-owned Halkbank to cut its ties with sanctions-hit Iran. ) ... Of course , there also is the US pressure related to Turkey's bid to purchase Chinese Missiles !

"Some ambassadors are engaged in provocative actions ... Do your job," Erdogan said in televised remarks in the Black Sea city of Samsun. "We don't have to keep you in our country."

Erdogan's remarks were considered a veiled threat to US Ambassador Francis Ricciardone who, according to some pro-government media outlets, told some European Union envoys that Washington warned state-owned Halkbank to cut its ties with sanctions-hit Iran.

The chief executive of Halkbank, Suleyman Aslan, was one of scores of people, including the sons of Erdogan cabinet ministers, who have been arrested in a high-profile bribery investigation that went to the heart of the government, which has been in power since 2002.

Aslan was charged early Saturday with taking bribes, the Hurriyet newspaper said without elaborating.

Judges in Istanbul also charged the sons of Interior Minister Muammer Guler, Baris Guler, and of Economy Minister Zafer Caglayan, Kaan Caglayan, with acting as intermediaries in order to give and take bribes, the Hurriyet newspaper reported without elaborating.

Police also seized $4.5 million in cash hidden in shoe boxes in Aslan's home, local media reported last week, citing judicial sources.

Halkbank came under fire from some quarters in the United States for its illegal transactions to Iran but the bank had previously denied the claims.

"We asked Halkbank to cut its links with Iran. They did not listen to us. You are watching the collapse of an empire," Ricciardone was quoted as telling EU ambassadors, according to Aksam, Bugun, Yeni Safak and Star newspapers.

But Ricciardone on Saturday denied the media reports as "baseless allegations," in his Twitter account in the Turkish language.

"Nobody should put US-Turkish relations into jepoardy through baseless allegations," he said.

One Of The Biggest Scandals In Turkish History Is Unfolding In Ankara

Turkey's Prime Minister Tayyip Erdogan addresses members of his ruling AK Party (AKP) during a meeting in Ankara November 29, 2013.

ISTANBUL (Reuters) - Istanbul's powerful police chief was dismissed from his post on Thursday over an anti-corruption action striking at the heart of Turkey's ruling elite and threatening the authority of Prime Minister Tayyip Erdogan at home and abroad.

Huseyin Capkin was the most senior commander so far to be sacked following the dismissal of dozens of senior officers on Wednesday over what Erdogan has termed a "dirty operation" to tarnish the government.

Scores of people, including sons of three ministers and some prominent businessmen close to Erdogan, have been detained in an action seen widely as symptom of a power struggle with a U.S.-based cleric who wields influence in police and judiciary.

"Just as naturally as it was for us to come, so it is equally natural for us to go," Capkin told Turkish television. "We have tried to serve our state, our nation with loyalty."

He was moved to a lowprofile post in the Interior Ministry.

Erdogan's AKP was created in 2001 from a coalition of conservative religious, centrist and nationalist politicians. It swept to power in 2002, drawing on fury over corruption and economic incompetence. Turks have seen unprecented prosperity since then, but underlying perceptions of graft remain.

"Corruption in Turkey is the Achilles Heel of the AK Party," Writer and columnist Cengiz Candar said. "It also undermines their approach towards their morality, which is grounded on Islam.

"Corruption has an important impact in terms of determining the success of ruling parties at the ballot box."

Erdogan, still by far the most popular Turkish leader of modern times, said he would not tolerate corruption, but saw in the raids a conspiracy to "create a state within the state".

"We will definitely unveil this organization," he said.

Erdogan has reshaped Turkish foreign policy, with strong diplomatic forrays into Middle Eastern affairs and a more assertive relationship with the United States and NATO allies. He won great personal popularity as a model for an islamic democracy, though that has faded in such countries as Egypt.

Turkish influence across the Middle East and Africa has been driven, many say, by three motors: Turkish diplomacy, Turkish commerce, notably in construction, and the work of U.S.-based cleric Fethullah Gulen, who has set up a network of private schools stretching also to Europe, Asia and America.

DOUBLE STANDARDS

Domestically, Hizmet backed Erdogan's moves to banish the army from politics, ending decades of military interventions to overthrow elected governments, including an Islamist-led administration in 1997. Hundreds of senior Turkish officers, strongly secularist and wary of Erdogan's islamist background, have gone to prison on charges of preparing a coup.

Professor Mehmet Altan at Istanbul University suggests Erdogan may be trying to fend off a broader corruption scandal to avoid being tarred with the same brush as his predecessors.

"They (the government) supported the steps against the military. Now that tutelage is gone but a different one is in power. You can't govern with these double-standards.

"Their image outside has been seriously tarnished as well...Unless there is a change, they risk further damage."

Gulen's Hizmet (Service) movement, long a close ally of Erdogan, has in recent months publicly fallen out with the Prime Minister over the prime minister's plans to shut down private schools in Turkey, including those run by Hizmet.

There have been differences also on what critics see as Erdogan's meddling in Turks' private lives and his uncompromising attitude over a violent police crackdown on protests last summer. Erdogan wrote the demonstrators off as "riff-raff" and cited a foreign conspiracy against Turkey; something he has also already alluded to in the graft inquiry.

The schools and other social organizations have won Hizmet wide if largely unseen influence in the police, security services, judiciary and within the AKP Party itself - the chief reason why actions by the police and prosecutor have been widely seen in Turkey as a manifestation of this tension.

Pro-government newspapers have accused Gulen's followers of running a smear campaign against AKP. A lawyer for Gulen said his client had no information about the investigation or knowledge of the officials running it.

The corruption investigation has weighed on sentiment in Turkey's financial markets as well, fuelling questions over political stability.

The AKP was formed by Erdogan who has been the strongest uniting force, holding together a broad coalition of political views. Any erosion of his authority, already tested by last summer's riots, could be hazardous.

"After this week the investors are questioning whether the party will stay united," Charles Robertson, chief economist at Renaissance Capital.

And from the Turkish press....http://www.hurriyetdailynews.com/ricciardone-refutes-claims-us-behind-turkey-graft-probe-.aspx?pageID=238&nID=59938&NewsCatID=315

Ricciardone refutes claims US 'behind Turkey graft probe'

ISTANBUL

US' Ambassador to Turkey, Francis J. Ricciardone has refuted Turkish media reports that United States was "behind" the ongoing graft probe in Turkey.

US' Ambassador to Turkey, Francis J. Ricciardone has refuted Turkish media reports that United States was "behind" the ongoing graft probe in Turkey.

"United States is in no way involved in the ongoing corruption and bribery operation," Ricciardone said in a written statement. "Nobody should put Turkey-US relations in danger with unfounded claims."

The statement came after three Turkish newspapers, Akşam, Star and Yeni Şafak, claimed today that Ricciardone had said "You will watch the fall of an empire" to EU Ambassadors in a meeting on Dec. 17, the day when a graft operation that hit the ruling Justice and Development Party (AKP) became public.Ricciardone denied that such a meeting happened.

Key political and business figures, such as Economy Minister Zafer Çağlayan’s son Kaan Çağlayan and Interior Minister Muammer Güler’s son Barış Güler, Azeri businessman Reza Sarrab and Halkbank General Manager Süleyman Aslan were arrested Dec. 21 by a court on duty in Istanbul.

December/21/2013

Turkish PM says graft probe targets gov't

Prime Minister Recep Tayyip Erdoğan has dubbed the ongoing corruption investigation into a number of high-ranking government officials “an ill-intentioned move of local and foreign actors targeting the government.”

“This is an operation with international dimensions and local sub-contractors,” the prime minister said on Dec. 21, while addressing citizens during a rally in Samsun, the first stop of his Black Sea visit.

“This operation is a step taken against the government, but far from that it has international and national dimensions. We will not be afraid of them,” he said.

“We will give this dirty game away as we did during Gezi,” he added.

He also slammed jurists “for acting under control,” in investigating the corruption and bribery allegations made against over 50 suspects, including four Cabinet members and sons of three of them.

“They should not be offended but if they act upon guidance, we will do what falls to us as politicians, as we always did. Why are there politicians, legislation and executive organs in this country?,” he stated.

“A member of the judiciary cannot give orders or impose pressure. If you try to control jurisdiction by imposing all kinds of pressure on these people, we will do our part. This is what we do,” Erdoğan further said.

December/21/2013

Two ministers' sons arrested in Turkey’s corruption probe

Some 16 suspects, including sons of two ministers and businessman Reza Sarrab, have been arrested over their alleged involvement in a graft scandal that hit the Justice and Development (AKP) government.

The prosecutor's office issued a ban on leaving the country for those who were released.

The operations were made up of three separate investigations in which a total of 71 people have been detained with morning raids.

The first raid was launched against Zarrab on allegations that he was running a crime ring. The Azeri businessman is accused of paying bribes to Cabinet members to cover his suspicious money transactions and get Turkish citizenship for his relatives and his men in the alleged crime gang.

The third probe is into allegations of construction permits given to a firm by Istanbul’s Fatih Municipality, despite reports ruling that this construction would threaten the safety of the newly built Marmaray tunnel.

Turkey's bosses issue probe warning as government widens police purge

ISTANBUL – Hürriyet Daily News

The business group TÜSİAD wades into Turkey’s landmark graft scandal, demanding the government stop trying to interfere with the judiciary

Turkish Industry and Business Association President Muharrem Yılmaz. AA Photo

Turkey’s largest business organization has urged the government to avoid any acts that may impact the independence of the judicial process in an ongoing graft investigation as the government continues to press for the purge of the police command.

“With regard to these [corruption and bribery] claims, all actions and remarks that may cast a shadow on the process should be avoided and the principles of judicial independence and the state of the rule of law should be maintained,” the Turkish Industrialists’ and Businessmen’s Association (TÜSİAD) said in a written statement on Dec. 20, stressing that the fraud claims presented a “worrying” picture.

TÜSİAD, which encompasses many of Turkey’s most prominent businesspeople, warned the authorities “not to repeat previous mistakes of past cases, which led to the victimization of people.”

“We expect all processes to be realized in such a way to support our confidence in the supremacy of law,” the organization added.

Amid heightened concerns over the government’s attempts to interfere into Turkey’s largest-ever corruption and bribery probe that has targeted people close to the administration, the government has moved to remove high-ranking officials in the police department.

In the latest of a number of massive purges, 14 heads of police departments were discharged Dec. 20, a day after the Istanbul police chief and 18 others were dismissed.

On Dec. 19 Istanbul Police Chief Hüseyin Çapkın joined a long list of police officials dismissed from their posts, to be replaced with Aksaray Gov. Selami Altınok.

Over 80 people were detained in Istanbul and Ankara on the morning of Dec. 17 as part of the probe into tender fraud and bribery allegations.

Turkey has been transfixed since the detention of the suspects, including the sons of Interior Minister Muammer Güler, Environment and Urban Planning Minister Erdoğan Bayraktar and Economy Minister Zafer Çağlayan.

Eight suspects were arrested at midnight on Dec. 19, while 50 more, including two ministers’ sons, Fatih’s mayor and Azeri businessman Reza Zarrab, were transferred to court.

After receiving their depositions, the prosecutors in the case sent the interior minister’s son Barış Güler and economy minister’s son Kaan Çağlayan to court with a request for their arrest, along with 12 others, toward evening, when the Hürriyet Daily News went to print.

Meanwhile, five suspects, who were taken into custody in raids staged on Dec. 17, have been released.

A few hours after two people were freed by the court on the night of Dec. 19, three more suspects were released after being questioned by the police department.

On the night of Dec. 18, another nine suspects were released in Istanbul after health checks.

December/20/2013

Some other reasons why the US might be annoyed with Turkey , why Turkey may believe there is a US agenda in play....

US further presses Turkey over Chinese missile bid

ANKARA - Hürriyet Daily News

The US increases pressure on Turkish companies intent on working with a Chinese firm selected to construct a missile defense system. The message was conveyed to a senior Turkish official

A Chinese soldier walks down a stairway behind a Chinese-made Hongqi-2 missile. US continues to voice distree over the possible Turkey-China deal. DHA photo

Serkan Demirtaşserkan.demirtas@hdn.com.tr

Washington has increased the intensity of its warnings against Turkish companies intent on working with a Chinese firm that was selected to construct a missile defense system, noting that the companies could risk business with their U.S. counterparts due to sanctions against the Chinese outfit.

The message was recently conveyed to Murad Bayar, the head of the Undersecreteriat for Defense Industries (SSM), by a senior U.S. military official who paid an announced visit to the Turkish capital, the Hürriyet Daily News learned from well-placed sources.

As a defense industry expert, the U.S. official discussed a wide range of issues regarding the Turkish-U.S. defense industry cooperation and sales, in the latest chain of frequent conversations between the two allies since Turkey announced Sept. 26 its decision to negotiate with China’s Precision Machinery Import and Export Corp. (CPMIEC) to co-produce anti-ballistic missile system.

After firm statements from NATO and U.S. officials that the Chinese MD-2000’s would never be interoperable with the NATO defense architecture, some Turkish government officials said local defense companies could work together with the CPMIEC to integrate its system into that of the alliance.

“This Chinese company is under U.S. sanctions. And these sanctions really hurt. A deal with the Chinese company will be toxic. Touching it would be like touching a poison fish. That would make it very difficult for Turkish companies to do the business they have been doing in the U.S.,” was the main message delivered by Washington in the latest conversations. The companies mentioned are believed to be Aselsan, Turkish Aerospace Industries (TAI), Havelsan and Roketsan – Turkey’s prominent defense companies.

U.S. officials also expressed concern at how Turkey has compared the Chinese andAmerican offers in a similar fashion. Recalling that the two offers were fully different and incomparable, the officials underlined that the U.S. offer corresponded with Turkish government requirements for certain capabilities, while the Chinese proposal did not.

On the much-discussed issue of interoperability, the U.S. officials reiterated that the Chinese system would absolutely not be integrated into the NATO defense architecture in line with the alliance policy on keeping Russian and Chinese technologies away fromNATO systems.

The Silk Cord

By JY896 | Friday, December 20, 2013 at 1:24 pm

I have long had a contentious relationship with Turkey. One of my favorite novels since childhood is a historical tale about the apex moment of theOttoman Empire. The only fly in the ointment was that my countrymen were the last ones to fall to the military machine of Suleiman the Magnificent – after about a century of TRYING, Turkey finally ground up the borders. Though it STILL needed another 30 years to secure the whole area, ultimately Turkey ruled directly or had dominion over the entire land.

But then again, it was a case of tables being turned – a millennium earlier, it had been Constantinople receiving the raids and paying the tribute…

While I was growing up, Turkey was known for three things. One was guest workers commuting to Austria and Germany, swarming the borders and roads in the summer and during Christmas. That institution of legalized ‘illegal immigration’ (e.g. non-assimilative, visibly ethnically different workers of a foreign culture, language and religion toiling at below-average wages WITHOUT enjoying the civil rights and social benefits of the host country) started in the sixties. While the program officially ended in 1973, the vast majority of workers stayed on, becoming ultra-long-distance commuters who would go home 2-3 times a year. The other two notable features of Turkey at the time were leather and gold. If you wanted either, Istanbul was the place to go – both because you did not have to pass through the iron curtain to get there, but mainly because both were available at a large variety and minimal prices (in terms of premium to spot, re: gold). The bazaar was held (grudgingly) in awe for its sheer volume and variety of goods both mundane and exotic. The fact that only a few had resources to make the trip, let alone buy anything, only added to the mystique.

I have been trying to keep an eye on developments vis-a-vis anti-government protests: true grass-roots movement of discontent against a corrupt and overbearing regime? Western meddling and attempted ‘Syria-style’ revolution highjack? Second wave of Arab spring (though I realize Turks and NOT Arabs)? And of course, one must not forget the connection of the story to precious metals – it appears by many (all) accounts that Turkey has been buying Iranian natural gas for gold bullion.

“The system was simple. As Reuters notes, Turkey purchased Iranian natural gas in Turkish lira, and transferring the proceeds to Halkbank accounts. Iranian gold traders then accessed the funds to buy gold in Turkey, which was subsequently carried in luggage to Dubai, and then sold for foreign currency to help sure up Tehran's dwindling foreign exchange reserves.

Remarkably, it was legal under the current sanctions regime, as long as the Obama administration couldn't prove that Turkish gold payments were made to the government of Iran (which strained credulity given Turkey's public admissions that they were selling gold to Iran in exchange for Iranian energy).” – May 17, 2013, The Atlantic

Some have speculated that Turkey has ALSO been facilitating a similar trade between the sanction-beleaguered Persians and the rest of the world – but in any case that trade seems to have been taking place, with or without Turkey.

“The second-largest producer in the Organization of Petroleum Exporting Countries, Iran said last month it will accept payment in any local currency or gold as new sanctions make it harder for trading partners to pay in dollars and euros.” – March 30, 2012, Bloomberg

So I got to thinking – if petrogold is indeed re-emerging, what is happening in terms of the ongoing gold price movements? If gold is ‘worth’ less denominated in fully convertible, ‘hard currency’ like Euros, Dollars or Yen, then the gold that Iran may or may not receive in exchange for its exported barrels has less purchasing power, thus benefiting the enemies of Iran. At the same time, lower gold prices might allow those who might USE gold as payment to acquire MORE oil for the same amount of fiat – but only presuming that the trade agreement for the sale of oil was denominated in weight of gold.

In light of all of the above, the news item perhaps lost in the tumult of this week is as follows:

“Two parts Crazy Eddie, one part Gatsby and one part Trump, Ali Agaoglu, No. 527 on Forbes’ billionaire list, is Turkey’s most famous and arguably most notorious construction mogul, a man known just as much for his collection of luxury cars and ex-wives as he is for his links to Erdogan’s government and the state housing authority in particular. […]

Today, Agaoglu is in police custody. Tuesday morning, in a series of raids that seemed to catch all of Turkey, including Erdogan’s government, entirely off guard, Turkish police detained at least 50 people on suspicion of tender rigging, money laundering and bribery. In a country where corruption investigations, at least those involving figures close to the ruling Justice and Development Party (AKP), are rare, this one has netted a number of very big fish: the sons of three Cabinet members, the mayor of one of Istanbul’s biggest boroughs, the general manager of Turkey’s second biggest state bank, Halkbank, several prominent businessmen, as well as a number of civil servants. And finally, Agaoglu.” 12/19/13, TIME

Notice the BANK involved in the story above. Now, the Western media has been very quick to pin the affair on THIS man, a Turkish cleric who is living in Pennsylvania:

Whether or not that is the case, I leave for readers who are more familiar with him and with Turkish current affairs. While on one hand he himself denies/deflects any involvement, or even HAVING a movement behind him in the first place, his students (devotees? disciples?) have opened a network of schools in 140 countries – and by many accounts, the graduates from these schools have reached the highest positions at levels of Turkish government. What perhaps makes all this even MORE interesting is this:

“That the U.S. government and, specifically, the Central Intelligence Agency support the Gülen movement is conventional wisdom among Turkey's secular elite even though no hard evidence exists to support such allegations. […]

Gülen attached twenty-nine letters of reference to his June 18, 2008 motion, mostly from theologians or Turkish political figures close to or affiliated with his organization. John Esposito, founding director of the Saudi-financed Prince Alwaleed Bin Talal Center for Muslim-Christian Understanding, who, after receiving donations from the Gülen movement sponsored a conference in his honor, also supplied a reference. Two former CIA officials, George Fidas and Graham Fuller, and former U.S. ambassador to Turkey Morton Abramowitz also supplied references.

The letters may have worked. On July 16, 2008, U.S. district judge Stewart Dalzell issued a memorandum and order granting Gülen's motion for partial summary judgment and ordering the U.S. Citizenship and Immigration Service to approve his petition for alien worker status as an alien of extraordinary ability by August 1, 2008.” – 2009, Middle East Quarterly

Hmmmm…… So is this a simple shot across the bow to the Turkish PM from an elusive, shadowy figure who acts as a puppeteer, moving his ‘sleeper cell’ followers against the PM at will? Is Gülen in league with/controlled by/ a creature of the US-based NatSecAgencies? Or merely a political player and ersatz spiritual/cultural authority exerting his influence to retain the lifeline of his movement (the Turkish government apparently planned to close the schools in question)? The network of religious schools propagating his brand of Islam is eerily reminiscent of the organization of Wahhabi institutions sponsored by Saudi petrodollars (in their structure, funding and proliferation, if not their principal philosophy). And it would seem convenient that the Agencies mentioned earlieralready have substantial experience in funding, working with and exploiting assets educated in such institutions. But this really seems to be taking it to a whole new level:

“His school network is impressive. Nurettin Veren, Gülen's right-hand man for thirty-five years, estimated that some 75 percent of Turkey's two million preparatory school students are enrolled in Gülen institutions.[12] He controls thousands of top-tier secondary schools, colleges, and student dormitories throughout Turkey, as well as private universities, the largest being Fatih University in Istanbul. Outside Turkey, his movement runs hundreds of secondary schools and dozens of universities in 110 countries worldwide.” – 2009, Middle East Quarterly

Destabilizing Syria DID work, but not with the degree of efficiency those directing it might have hoped. All-out, multilateral war did not break out. Whether that bit was off-script, or if we just aren’t far enough along in the play yet remains to be seem, but in any case SOMEONE seems to be keen on at a minimum reducing the power of government in countries in the area – including neighboring Turkey. Who it seems is also a key trading partner of Iran. Who may or may not be involved in a high-volume gold settlement system centered around Iranian oil and gas. Could this be considered a warning to stop the trade or to restore/increase it to levels seen before the tightening of Iranian sanctions? Was Erdogan’s outfit simply skimming too much from the top?

Another (to me) intriguing angle: with the Geneva deal, US-enforced sanctions have eased, giving S. Korea, China and India waivers for buying Iranian oil. However, even if said countries are allowed to pay Iran with their own currency, or Euros, or USD, there are potentially a significant amount of things Iran wants/needs but cannot acquire with fiat currencies, due to the limits on outbound financial transactions it can make, and the types of goods which may be traded. Could it be that Iran isn’t so much accepting gold because it is one of the few types of payment it can RECEIVE, but that it is preferred as a form of payment because it is one which Iran can use most widely to make PAYMENTS? So could the recent developments in Turkey have anything to do with the fact that Iran has just interrupted negotiations in Geneva over the future of global relations with the country?

Or could it be the case that honest, forthright members of law enforcement and the judicial system are standing up, and attempting to take back their country from a ruling caste corrupt to its core?

Whatever the case, this could be a story worth keeping tabs on. Just because it does not remain in the headlines ALL the time does not mean nothing’s happening. An actively simmering Middle East that can be ‘whipped’ into all-out war pretty much at will is an ongoing requirement for the preservation/life-support of the petrodollar. Turkey itself is in a crucially important strategic position geographically, making it a target of imperial interests (and perhaps manipulation) from more than just one side. And it’s not like there have been any conflicts in recent years/decades due to the production, sale and transport of hydrocarbons in this region…

“In earlier times, the Turkish sultans sent to high-ranking personalities who were sentenced to death, a silk thread - stylishly usually in a small jewelry box. After receiving, the condemned was strangled by a servant or soldier. This method offered the very great advantage that the sultans could vacate brothers and nephews out of the way to secure their rule, without shedding their royal blood. Occasionally, even the convicted had the opportunity to escape the strangling by suicide. If the blood flowed, this was thus the responsibility of the individuals affected.”

(For those inclined to do more historical reading on what a REAL game of thrones might have looked like, and more macabre details on royal fratricide and similar hobbies, I can recommend this postand this Smithsonian article.)

A fascinating twist was also introduced for top officials/nobility who were NOT a direct threat to the ruler's position:

"For a grand vizier, however, there was still a chance: as soon as the death sentence was passed, the condemned man would be allowed to run as fast as he was able the 300 yards or so from the palace, through the gardens, and down to the Fish Market Gate on the southern side of the palace complex, overlooking the Bosphorus, which was the appointed place of execution.If the deposed vizier reached the Fish Market Gate before the head gardener, his sentence was commuted to mere banishment. But if the condemned man found the bostanci basha waiting for him at the gate, he was summarily executed and his body hurled into the sea." -- Smithsonian Magazine

The silk cord is one step worse than a severed horse’s head – it is not so much a warning to cooperate, but rather a notification of imminent violent death. It definitely seems to me that thisepisode was a warning, not a ‘true’ silk cord (yet) – the only question is who was the sender? Will the current government 'run for it', or try to make a stand?

TURKEY TO GET 40% OF CRETIAN FIND

Secret cash flown into gas-rich Cyprus

Troika contractors strip the Greek corpse

How Berlin exaggerated Athens’ problem to win Europe

Senior Athens sources last night confirmed The Slog’s blogosphere exclusive from last Monday on the subject of 70% of the income from Cretian energy and rare earth finds off Crete going into non-Greek coffers. But further evidence of bribery and energy finds in Cyprus show yet again that Greece’s sphere of Mediterranean influence is merely an unwilling prize in the ongoing energy, banking and German hegemony game.

Said a senior Greek Government consultant yesterday:

“All I know is that the Professor [minerologist Antonis Foskolos] is absolutely correct. I have the technical reports to prove it…..there is a secret deal whereby Turkey gets 40%, Greece 30%, Cyprus 20% and Brussels 10%.”

The figure most likely to both alarm and anger Greeks of all class and age groups is the inexplicable (in justice terms) award of more income from the Crete find for Turkey than Greece. But this is really nothing more than those involved in the Cyprus energy heist sharing out the spoils….and cutting out both the Americans and the Israelis. Quite a coup for Erdogan.

Hot on the heels of this news comes the announcement of a major oil find off Cyprus at region 12 – amounting to around 1.2-1.4 billion barrels….plus, very much under the table, further ECB bribery to keep the Cypriot élite sweet: some €5 bn euros in cash has been secretly flown into Nicosia. “Nobody counted or even certified the cash delivery,” said a source, ” so they don’t know in what form the five billion of cash went into Cyprus Central Bank accounts”.

While some are clearly on the take in Cyprus, the Cretian deal in particular is bound to raise questions about what senior Athens government ministers might have taken as their share of doing a deal that is, by any standards, ludicrously unfair to Greece.

Why, for instance, have the confirmations of Cretian energy and mineral finds not been used by Samaras and co as collateral with which to force the issue of debt relief for Greece? Why indeed have creditors not been offered an energy futures bond swap in return for unrepayable debt? Better a futures deal, surely, than winding up with nothing.

A lot of the key to this (apart from the usual standard issue Greek elite corruption) is the Troika itself, an organisation beyond the accountability of any elected government body. With such freedom, the Troikanauts have hired several financial consultancies, who go on to play a central role in all the eurozone bailouts….especially the Greek bailouts and the infamous Cypriot bailin.

The usual suspects are always involved: Deloitte, Ernst&Young, KPMG and PriceWaterhouseCoopers (PwC) – and the end result is a “golden circle” of a dozen or so large firms with a monopoly on handling EU bailouts. They are usually hired without any public tender – sometimes despite potential conflicts of interest, which arise from links to investment funds and other financial service providers.

The case of New York-based consultancy Alvarez and Marsal is particularly intriguing. During their ‘advice’ period for the Cyprus bailin, A&M screwed up bigtime and overcharged – according to an internal audit by the Cyprus central bank board seen by the site EUobserver. But in December 2012, the Cyprus central bank chief Panicos Demetriades shortlisted Alvarez and Marsal for several new contracts.

He did so despite the fact the board had “ruled out” the consultancy due to “potential perceived conflicts of interest” related to its Bank of Cyprus evaluation.

The cash flights, bribes, backstairs deals and energy horse-trades are being organised and pushed through by further sub-contractors hired by the Golden Circle. BlackRock Solutions, for instance, stands accused by some observers of using insider knowledge after the Athens Government awarded them a contract worth €12.3 million.The Samaras regime did so because kickbacks were involved, and the Troikanauts had become so hated in Greece….so BlackRock Solutions used a fake name (“Solar”) and recruited 18 armed security guards to do its “work”. From what I could see early in 2013, this mainly involved providing armed guards for the likes of Venizelos – but Athenians know perfectly well who they were. I would point them out, and contacts there would shrug and mutter “Blackrock”.

However, the consultancy’s appointment also included subcontracting to the Big Four audit firms and having detailed knowledge of recapitalisation plans. Being the biggest asset manager in the world, that gave them a competitive advantage if they used the knowledge….for example, against close competitor Pimco….which had also been hired earlier.

But other clouds, smoke, mirrors, cloaks and daggers remain to niggle away at the credibility of the EU, other major powers, national leaders and the ECB when it comes to how and why Greece and Cyprus wound up being raped. Cyprus was, for me, an open and shut case: egged on by Wolfgang Schaüble and Mario Draghi, the EC simply removed the island’s major income source and then impoverished its major bank depositors….while Russian and Cypriot crooks and gangsters suspiciously managed to remove their money ahead of time.

Equally however, there remain inconsistencies and irregularities in the way solid Greek assets were ‘used’. A good example is its hospital infrastructure.

On 2nd October 2009, before the October 2009 Elections, the National Statistical Service of Greece ELSTAT sent to Eurostat the deficit and debt notification tables for Greek hospitals. These included an estimate of the outstanding liabilities at €2.3 billion. The new government inflated the €2.3 billion by €4.3 billion making it equal to €6.6 billion as it is described in their “Technical Report on the Revision of Hospital Liabilities” of February 2010. (This must also be viewed, by the way, in the light of Elstat whistleblowers who have since then confirmed that senior EU officials and politicians encouraged the Athens government to exaggerate the size of its fiscal problem as a whole.)The new government then tried to load all this extra €5.4 billion of hospital liabilities into one year, 2008. At first, Eurostat rejected this in writing, but later it bowed to government pressure.

This entire exercise is clearly against the European Regulations ESA95 (see ESA95 par. 3.06, EC No. 2516/2000 article 2, Commission Reg. EC No. 995/2001) and against the European Statistics Code of Practice, especially regarding the principles of independence of statistical measurements, statistical objectivity and reliability. It was also very clearly to Greece’s disadvantage: but the Papandreou Government did it. Why?

The Slog posted extensively about this at the time, and was then requoted and reblogged widelyelsewhere. The reason for the overstatement was in fact very simple: the Franco-German debt exposure desperately needed ALL the eurozone members to agree to new help for Greece. The situation thus had to look as bad as possible. As I wrote soon afterwards:

‘Somewhere in the midst of these talks, Berlin requested a smaller meeting with the Greeks. At this meeting, three sources (two Greek and one German) allege, the small German delegation made an astonishing observation: the situation would “have to look more desperate” in order to justify a bailout to the other eurozone members. That is to say, only widespread fear of the entire eurozone being damaged would get the member States to pile in with bailout monies. What Berlin was really worried about, of course, was that the Franco-German banking system might collapse if Greece wasn’t saved. And at that stage, little or nothing had been done to make the sector better able to withstand a derivatives wave.’

I know that I bash on about this with every post about Greece, but those of us further West must grasp once for all the reality that Greco-Cypriot problems are dictated as much if not more by energy geopolitics and major power bank fears as they were by corrupt Greek leaders and idiotically greedy Franco-American lenders. Over the years I have pointed out the obvious sub-plot going on, but each time much of what The Slog suggested has been ridiculed or dismissed as ‘power politics paranoia’.

Unfortunately for those who said such things, I have been largely vindicated..or rather, my sources have: there is a battle for energy hegemony going on between Washington, Brussels and Moscow, there is a tug-of-war going on between Greece, Cyprus, Turkey, Brussels and Israel about South-East Med mineral and gas finds, Turkey has been rewarded on the sly for toeing the NATO bollocks in relation to Syria, Recep Erdogan is proving to be an unhinged Islamist who imprisons opposing military and political leaders, David Cameron’s pro-Erdogan/anti-Israel speech of two years ago has been shown up as badly judged nonsense, Syrian intervention would have turned into Anglo-American disaster, energy has been found off Crete and Cyprus, American naval influence has scared the EU/EC axis of thuggery into action, and there is a lot going on behind the scenes of so-called Troika debt management to suggest that, as ever, this is a question of industrial scale corruption and munnneee.

It’s easy to tell from both hits and comment threads these days that Greece has become a forgotten subject for the vast majority of EU and US citizens. But I promise you, for the oil business, the spooks, the Russians and the banks, it is anything but. And don’t get me started on the Chinese.

Wake up: a fundamentally decent and solvent nation is being meat-cleavered to bits by bank interests and energy mania. For all its internally irresponsible and venal Establishment hoodlums, the real Hellenic Republic’s deficit - at 7.8% of gdp in 2009 – was grossly exaggerated and eventually emerged (in a slavishly reported BBCNews story) of November 15th 2010 – at 15.4%. But as former ELSTAT board member Zoi Georganta testified in 2011:

“….had the 2009 warnings from this Commission been been enacted even as late as Papandreou’s arrival, ‘the measures would have succeeded if they had been properly and promptly implemented without any need for a bailout….”

Berlin wanted Franco-German banks protected, but it also wanted a victim to give Germany the dominant role in eventual FiskalUnion. It has got pretty much everything it wanted, but Greece is dead in the water. This is the measure of Merkel’s genius for Weltpolitik.

Yesterday she was confirmed as the Chancellor at the head of a Grand German political alliance. A month ago, Brussels-am-Berlin told Samaras to go whistle for his promised Christmas debt relief. The German-dominated EC now has the same role as Jeremy Hunt does with NHS Trusts in England: to quietly bankrupt them – as the necessary excuse for Mammon’s gauleiters to step in.

Athens (and Nicosia) have accepted the following: falsified debt figures, a repayment schedule that is a permanent trap, endless waves of destructive austerity, terrible levels of citizen destitution, the dictatorship of banking and investment interests, German tabloid insults about the Greek work ethic, German lies about personal Greek wealth levels, reneging on various promises by the EC and ECB, economic grand larceny, depositor theft, and now a grubby share-out among its enemies of the main wealth route the Republic has out of this cynically inflicted poverty.

That this has been achieved with the active collaboration of its political élites is brutally obvious. One result of that despicable Fifth Columnism has been the rise and rise of Golden Dawn. What Greece needs above all right now is the decline and fall of Antonis Samaras. In the meantime, the hour has arrived for some real investigations of how this appalling mess really happened….and some direct action to put the New Democracy Coalition and its EC paymasters under intolerable pressure.